Why 2014 is a Key Year for the Internet of Things

By Sandeep Kishore |
Posted 04-10-2014

Why 2014 is a Key Year for the Internet of Things

By Sandeep Kishore

It seems strange to say, but we live in a very unconnected world today. While this statement might seem counterintuitive given the ever-increasing digital connectedness of our lives, most of the objects that we use on a daily basis are not connected—not to each other, not to us, and not to the Internet. Everyday examples include household appliances ranging from alarm clocks to air conditioning units; bicycles, cars, and other vehicles; and all manner of industrial equipment, large and small. According to Cisco, more than 99 percent of the things that will be connected to the Internet in the future are not connected today. Put another way, this means only 12 billion of 1.5 trillion things are now connected.

This connectivity is posed to drive one of the largest technology transformations in the coming decade, introducing a shift from the Internet of People to the Internet of Things (IoT). According to IDC, the IoT will gain so much momentum by 2020 that more than 212 billion devices around the world will be connected. That’s the equivalent of 27 devices for each person on the planet. And 30 billion of these 212 billion devices are expected to be completely autonomous, requiring no human involvement.

Four emerging technological capabilities will enable the increased pervasiveness of the IoT. These capabilities include the ability to measure environment variables through advanced sensors; communicate these measurements via Wi-Fi, 4G and Bluetooth technologies; analyze this data using powerful, tiny microprocessors; and collaborate with other devices and infrastructure through machine-to-machine connectivity and produce the desired output.

Consider the hypothetical example of a CIO whose early morning flight is delayed by 30 minutes. The CIO's phone tracks the flight delay through the airline's Website and communicates the data to her alarm clock, car and beloved coffee machine. While the CIO is sleeping, her car analyzes the area's traffic patterns to see if any extra driving time is required and transmits the information to the alarm clock and still-idle coffee machine. The car also adjusts the time of the CIO's parking reservation at the airport. Without any effort, the CIO gains 20 minutes of extra sleep—and the coffee pot is brimming with French Roast when she rises from bed.

Once airborne, the CIO can, if need be, adjust the temperature of her home or double-check whether her car is locked via the in-flight Wi-Fi. Before arriving at her destination, the CIO's rental car pick-up time has already been adjusted based on the flight's late arrival, and the CIO's phone informs everyone that she is scheduled to meet at her business destination of the delay in her flight (and provides an estimate of her arrival). During the return flight that evening, the CIO's phone informs her that back home the refrigerator has ordered orange juice, a favorite snack and various other food items, as needed. And two shopping bags of groceries are waiting by the CIO's front door when she pulls into the driveway.

Why the Internet of Things Is Happening Now

Now this scenario sounds both happily convenient and efficient, but an interesting question to ask is, Why is this happening now, as the underlying technologies have been available for some years now? The answer lies in the inflection point of three key laws, making the hyper-connected of the IoT simultaneously possible within technical, economic and physical realms. First, according to Moore’s Law, as stated by Gordon Moore in 1965, processors will double their capacity every 18 months, driving down costs and allowing us to put powerful yet inexpensive sensors and microprocessors in a lot of places. Accelerometers, for example, cost about $2 in 2005 and are expected to cost 20 cents in 2015. Second, Koomey’s law states that the energy efficiency of computation doubles roughly every one-and-a-half years, enabling sensors and processors to function for many hours with minimal energy requirements. For example, a fully charged Macbook Air that performs for 8 or more hours today, if operated at the energy efficiency of 1992, would last only one-and-a-half seconds. Finally, Metcalfe’s law states that the value of a network grows exponentially with the increase in the number of nodes. No wonder the IoT is growing wildly today; the number of connected sensors was just 10 million in 2007, but it increased to 3.5 billion in 2010, and a few optimistic estimates have it reaching 1 trillion by 2020.

Why 2014 is a Key Year for the Internet of Things

This places us at the cusp of enormous consumer and industrial opportunities, making 2014 a key year for the IoT. Mainstream adoption of several industrial and consumer IoT products and technologies will drive increased connectivity, richer user experience, improved efficiencies and higher collaboration across the ecosystem. In an industrial context, the IoT enables the connectivity of intelligent devices to drive higher efficiency through better visibility, collaboration, automation and optimization, and drives the ecosystem's advantages of decision-making over a complex set of platforms.

According to GE, 46 percent of the global economy will benefit from the industrial Internet. Manufacturing contributes to 16 percent of the current global GDP, and the impact of the industrial Internet will reach beyond manufacturing and into different services sectors. And savings in industrial efficiency could range from $320–640 billion per annum. And while these numbers seem huge, they are not out of context. Every day, an incredible amount of waste happens in the current business systems due to suboptimal inventory planning, production, supply-chain and ordering systems. These could be improved or eliminated if intelligent devices and machines were to communicate with one another in a secure, real-time manner and make analytics-driven decisions.

Welcome to the Connected-Life Market

The IoT in a consumer context is even more fascinating. Consumer-oriented IoT products like smart watches, smart thermostats and home-security systems, smart white goods, and smart TVs and entertainment platforms are expected to have a fast adoption rate, with people embracing connected devices, and enriched user experiences, that address real-world situations. The low unit price point of many of these smart products is also a critical issue as adoption will suffer if consumers do not buy and use these smart products daily. And the more consumers use these smart products, the more data companies will have to improve subsequent devives and platforms. A Business Insider report says "the connected life market" will be a $2.5 trillion opportunity by 2020. In the near future, these IoT consumer products will be an integral part of our lives, much like smartphones are today.

Consumer IoT technology is taking the early lead, with a smorgasbord of products already on the market, and with consumer acceptance and adoption broadening every month. This is especially true with comparatively inexpensive endpoint devices like smart watches, fitness bracelets or other health-related wearable devices. Consumer devices with higher price points, like white goods and cars, will advance in acceptable as consumer confidence grows, prices come down, and services are developed the products to increase their utility.

Industrial IoT, on the other hand, is expected to follow the trend, but lag behind. The key reason for this slower growth is the required large financial investments, making business cases far more complicated and difficult to gain approval for. However, the industrial IoT will grow exponentially toward the later part of the next decade as businesses become convinced of its advantages.

Of course, the Internet of Things is not possible without the creation of new standards from industry leaders and extensive collaboration and cooperation between them. IoT development is currently fragmented, and while this is common for an emerging technology, the issue needs to be quickly addressed. In particular, IoT security regulations are essential to the technology's success. Connected devices, by the very nature of their operations, handle a lot of sensitive data. Robust security standards and protocols will be required to give customers the confidence to adopt IoT without worrying unduly about it. These not insubstantial variables will influence how fast we will see the intertwined futures promised by the consumer and industrial IoT. I, for one, can't wait.

About the Author

Sandeep Kishore is corporate vice president and global head of sales and practice for engineering and research and development services, HCL Technologies.

To read his previous article for CIO Insight, "The Approaching Era of Hyper-Personalization," click here.